Rent control gains traction as housing costs ‘crush’ tenants

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A tenant signs a petition to put rent control on the Pasadena ballot next November. Allison Henry of the Pasadena Tenants Union, right, said she’s seen a lot of overcrowded and dilapidated apartments while collecting signatures. Supporters need to get about 12,900 signatures by May to qualify the rent control initiative for the November ballot. (Photo by Chris Rusanowsky)

Josh Butler, executive director of Housing Long Beach is one of the organizers of a signature-gathering campaign seeking to put rent control on Long Beach’s ballot next November. “People are paying more and more on rent, and as a result, people are getting pushed out,” Butler said. (Photo by Thomas R. Cordova, Daily Breeze/SCNG)

Theresa Harvey 58, has been told to leave her one-bedroom apartment of 19 years so a new owner can renovate the downtown Long Beach building. “I have nowhere to go,” the disabled tenant said. Initiatives proposed for the November ballot in four Southern California cities would outlaw the ouster of renters for reasons other than lease violations or serious offenses. (Photo by Thomas R. Cordova, Daily Breeze/SCNG)

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Rent control initiative proponent Derek Steele talks to supporters of the Inglewood petition drive outside city hall in October as paperwork to start a petition drive was turned in to the city. Supporters expect to get the 10,000 signatures needed to qualify for the November ballot by the end of April. (Photo by Adriana Swain, courtesy of Uplift Inglewood)

A tenant signs a petition to put rent control on the Pasadena ballot next November. Allison Henry of the Pasadena Tenants Union, right, said she’s seen a lot of overcrowded and dilapidated apartments while collecting signatures. Supporters need to get about 12,900 signatures by May to qualify the rent control initiative for the November ballot. (Photo by Chris Rusanowsky)

Josh Butler, executive director of Housing Long Beach, says rent control is needed so residents can remain in their community longer, allowing children to stay in the same schools and promoting neighborhood stability. Supporters need to get at least 27,462 signatures by the end of May to qualify the rent control initiative for the November ballot. (Photo by Thomas R. Cordova, Daily Breeze/SCNG)

Clipboards in hand, signature-gatherers are fanning out across four Southern California cities this month, turning up at supermarkets and metro stops and apartment complexes to pitch a measure for the November ballot that they say will be salvation for renters.

But for landlords, their pitch is blasphemy.

At issue is whether the cities of Long Beach, Inglewood, Glendale and Pasadena should join a tiny band of California cities that already have rent control and “just cause” eviction laws that prevent landlords from ousting tenants in good standing.

And the idea has already spread far beyond those four cities. Rent control battles have been flaring up across California over the past two years, as rents have soared and investors have fixed up older buildings to jack up profits, often pushing out longstanding tenants in the process.

Two other Southern California jurisdictions — Santa Ana and the county of Los Angeles — are studying possible action on rent control for apartments or mobile homes. Petition drives also are underway in Sacramento and Santa Cruz.

Meanwhile, rent control has already appeared on municipal ballots in seven Bay Area cities over the past two years, winning approval in two — Richmond and Mountain View.

There’s even a statewide effort to put an initiative on California’s November ballot that would repeal the Costa-Hawkins Act, a 1995 law that severely limits rent control in the 17 California cities that already have it.

Supporters see the broad push for rent control as a backlash against unfair landlords and out-of-control housing economics.

“Renters have been pushed to the breaking point,” said Long Beach housing advocate Josh Butler, one of the backers of the city’s #RentControlNOW Coalition.

“We’ve seen the stats. More and more, people are spending 50 percent of their income on rent. And the dream of homeownership; we’re seeing it slip away.”

In a state traditionally hostile to rent control, a turning point might be at hand.

Ten of the 13 California cities where rent control recently has been debated are majority-renter enclaves. And with the number of renter households rising statewide, some experts predict California soon will become a majority-renter state.

That worries landlords. Groups that have long been vigilant to fight any effort to limit rent hikes and “no fault” evictions suggest the new proposals generally miss a bigger point: Lack of housing is what’s driving up prices.

“Rent control is really putting a Band-Aid over the problem. People take their eye off the ball,” said Tom Bannon, chief executive of the California Apartment Association.

“The ball is we need to add more housing, quickly.”

Rising despair

For many renters — even employed renters who feel like they already pay a lot for shelter — the current economic trends in housing aren’t sustainable.

Jeri-Lee Mendiola, 39, a sales rep for a school yearbook company, last year had to leave her apartment in a 92-year-old subdivided house in Pasadena. The reason? Her rent went up 60 percent.

Until then, she paid just $975 a month for her 450-square-foot unit. The $600-a-month increase would leave her with less than $400 each month for food and other expenses.

She now pays $900 a month for a two-bedroom townhome in Duarte, 11 miles to the east. But she shares it with her sister.

“They have to make money,” Mendiola said, referring to landlords. “But… they can’t just increase (rent) 60 percent. If there have to be increases, it … has to be gradual.”

That sentiment is spreading. Housing groups in Orange and Los Angeles counties are seeing a spike in the number of tenants calling to complain about big, sudden rent hikes. The Fair Housing Council of Orange County, for example, reported that rent increase complaints rose from 2 percent of all calls in 2010 to almost 12 percent last year.

Landlords and some economists argue that rent control doesn’t work. They say it can drive up rents for non-rent-controlled units and lead to stagnation in the number — and condition — of those units that are rent controlled.

Tenants in the grip of an unfolding housing crisis don’t buy that argument.

Responding to a recent Southern California News Group online survey, 220 out of 341 renters said they support rent control, while just 23 opposed it. The rest were undecided.

“This housing crisis that we have is going to launch all sorts of proposed solutions,” said Dowell Myers, a University of Southern California demographer and urban planner. “When people are desperate, they’re going to go for anything.”

Over the past seven years, rent increased $337 a month on average in Orange County and $450 a month in Los Angeles County, according to Reis Inc. In the Inland Empire, the average seven-year gain was $255 a month. That amounts to rent hikes of about $36 to $64 each year for the average tenant.

But some landlords are playing catch up after years of neglecting to raise the rents, creating the rent version of sticker shock for some tenants.

“You hear stories of people facing hits of $600, $700, even $800 (a month) in rent increases,” said Mike Van Gorder, 32, a photographer and a former Glendale city council candidate who is helping to lead Glendale’s current rent control drive.

Allison Henry, 43, an organizer with the Pasadena Tenants Union, said she has knocked on 400 doors as part of a campaign to gather 12,900 or more signatures by May.

“It’s really interesting seeing what I’m finding. More people (living) in a unit. Front rooms turned into bedrooms. People who have lived here a long time getting large rent increases: $400, $500, even as high as $600,” Henry said.

“The condition of the apartments really debunks the claim that rent control causes buildings to fall into disrepair. … There are a lot of buildings that haven’t seen any capital improvements.”

How it works

Rent control varies from city to city, but all versions of it tend to cap rent hikes and limit the landlords’ right to order a tenant to move out. The rules also usually create rent-control boards to oversee the process and mediate landlord-tenant disputes.

Unless a city has enacted tenant protections, California law currently lets landlords raise rents as they see fit. It’s also legal for landlords to evict tenants without cause simply by giving them least 30-days notice if they lived in the unit less than a year or a 60-day notice if they’ve lived there a year or more.

The rent control initiatives under consideration in Southern California are similar to existing rent control laws. All would limit rent hikes to once a year, with the size of the increase tied to the annual inflation rate — up to a maximum of 4 percent in Glendale, 4.5 percent in Pasadena and 5 percent in Long Beach and Inglewood.

Unless the Costa-Hawkins Act is repealed this November, rent control wouldn’t apply to properties that law exempts: Single-family houses, condominiums and all apartments built after Feb. 1, 1995. Landlords also would be able to reset rents to market rates after a tenant moves out.

All four measures also would ban evictions unless tenants failed to pay the rent, broke the law, or otherwise violated their lease.

“Everybody hears if there’s rent control, people aren’t going to maintain their units,” Glendale activist Van Gorder said. “We wrote our ordinance so you can’t do that. You won’t get your rent increase” if you don’t maintain your rentals.

A misguided policy

Rent control, landlords say, isn’t just an attack on private property rights. It plain doesn’t work — not for landlords or tenants, they say.

They cite a host of economic studies to prove their claim.

The most recent, published last October by economists at Stanford University, found that rent control in San Francisco led to greater stability and substantial savings for those lucky enough to get it.

But the study also found that the supply of rent-controlled units fell 15 percent in the city from 1995 through 2012 because owners converted their properties to condos or otherwise redeveloped their buildings. That led to a 25 percent decrease in the number of renters living in rent-controlled units, driving up San Francisco’s overall rent by 7 percent.

“Rent control is not the answer,” said Johanna Cunningham, executive director of the Long Beach-based Apartment Association, California Southern Cities. “Look at New York, San Francisco and other areas with rent control. (They have) the highest rents in the country.”

Kyle Kazan, president and CEO of Long Beach-based Beach Front Property Management Inc., said tougher rules about booting people from rental units would make it tougher to clean up the gang-infested buildings he manages in South Central Los Angeles.

Rent control is a misguided, outdated policy that will transfer “nightmares that are going on in Los Angeles, Santa Monica and West L.A. to these (other) cities,” said Leon Khachooni, executive director of the Pasadena-based Foothill Apartment Association.

Landlords note that rent control is not “needs based,” meaning affluent tenants are as likely to benefit as low-income renters.

“In the final analysis, rent control is an exclusionary policy,” said Bannon of the state apartment association. “It may have a short-term solution for people in those units, many of them not low income. But, in the long term, it really becomes an exclusionary practice.”

Majority-renter state

Those arguments could fall on deaf ears as California becomes a renter-majority state.

Renters made up 46 percent of California households in 2016, up from 42 percent in 2005, U.S. census figures show.

Myers, the USC demographer, agrees with economists who predict the state soon might have more renters than homeowners, though he noted that the trend wouldn’t guarantee renter domination of the electorate; homeowners and older citizens are more likely to vote.

“A bigger factor is the housing crisis,” Myers said. “People at the bottom are getting crushed.”

Tenants rights activist Butler noted that polling shows 70 percent of registered voters in Long Beach (a city where 60 percent of the residents are renters) support rent control. And Van Gorder predicted rent control will pass by a 60-40 margin in Glendale, where renters make up almost 66 percent of the residents.

Butler also disputed the notion that rent control doesn’t work.

“Work for who? Work for renters? Work for seniors? Work for the community? I think they’ll say it works quite well,” Butler said.

“Does it work for people with unbridled greed? It may not work for them.”

For more than a decade, Jeff Collins has followed housing and real estate, covering market booms and busts and all aspects of the real estate industry. He has been tracking rents and home prices, and has explored solutions to critical problems such as Southern California’s housing shortage and affordability crisis. Before joining the Orange County Register in 1990, he covered a wide range of topics for daily newspapers in Kansas, El Paso and Dallas. A Southern California native, he studied at UC Santa Barbara and UC Irvine. He later earned a master’s degree from the USC School of Journalism.